GAINESVILLE - Gainesville City Council got good news and not so good news with their decision Thursday to issue bonds to pay for purchase of the old county jail from Hall County.
According to CPA Dianne McNabb, whose company, PFM Group, is handling the bonds, the City can refinance and issue new bonds on $2.8-million in old debt at a two and a half percent tax exempt interest rate, producing a savings of about $35,000 a year. But for new bonds to pay for the jail the rate is higher at four percent because Corrections Corporation of America is leasing the jail and the bonds are taxable.
"When it's used for a purpose like that, the IRS is sort of funny and they don't like the benefit of those low tax exempt interest rates to go to private companies," McNabb said.
The bonds are for 15 years but McNabb said the city could refinance the bonds at a tax exempt rate in seven years if CCA moves out.
"If the federal government gives up their lease and no longer puts prisoners there and it goes to a city purpose you'll be able to pay them off and issue bonds on a tax exempt basis," McNabb added.
RACE TO THE TOP SUPPORT
City Council members and Mayor Danny Dunagan showed full support of Gainesville school efforts to pursue a major education grant from the federal 'Race to the Top' program.
Director of Development Christine Brosky said the U.S. Department of Education wants community comment on the $20-million class room grant.
"The premise of the grant is personalized learning and with that is attempting through a grant process to do one to one technology for students," Brosky said. "We seek City Council's approval, they have to sign off on it because U.S.-Ed is seeking comment from the community and that is the best way to go about receiving that comment."
School Superintendent Merrianne Dyer said 45 systems nationwide are applying for the four year grant. The deadline for applying is October 30th.